Building your own home can save you money, but plan properly so you're financially safe not sorry
Get a detailed tender specification and quotes from at least three builders. When you have made your selection, add costs such as utility connection fees. Self-build manuals are useful for helping you estimate costings, but if figures frighten you, consider hiring a quantity surveyor. ‘Their fee is around 15 per cent of the build or £200 per hour,’ says Quantity Surveyor Jonathan Berney.
'Don't forget to include VAT in your budget'
Where are you going to live while your project rises from the ground? In a caravan on site, on your best friend’s sofa or, like most people, in your existing home and dual-mortgage hell? Whatever your living arrangements during the build, cost them fully.
Your ideal mortgage is the one which suits and protects your grand design best. Not many building societies understand the economics of self-build,and many won’t lend on land, so it can make sense to go to a specialist consultant. Traditional self-build mortgages release stage payments in arrears, but this is off - putting for many since you have to fund the work until it is complete. The accelerator mortgage, pioneered by BuildStore, offers peace of mind as it releases up to 95 per cent of your funds in advance over six stages.
There's a lot to insure against on a build. At the very least you’ll need employer’s liability insurance – the employer being you. In fact, don’t make the common mistake of presuming that your contractor will take responsibility for any insurance and warranty issues. Public liability insurance is essential in case people stray on to your land and fall down a pothole. And a structural warranty will give you protection against latent structural defects for 10 years after project completion.
Get mortgage protection for the self-builder for critical illness and accident. There are thousands of accidents on British building sites ever year, and you are being slightly unrealistic if you think you can’t add to the number. For more help and advice visit our online mortgage advisor.
Financial Services Call Back
Increasing your property equity by buying a house and renovating it, is a good way to protect yourself against falling house prices. However, not all lenders will lend on this type of project and even fewer if the original house is uninhabitable. Therefore rather than going direct to lenders, save time by contacting a company which specialises in self-build and renovation finance, as they will understand what your project involves and be able to recommend a suitable lender.
If you would like to discuss finance for your project, follow the link below and an expert from BuildStore will call you back at a time that suits you.
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Mainstream institutions are often wary of lending on what they see as risky building methods such as straw bale and cob. ‘Do your research before applying. The last thing a would-be borrower needs is to be credit-checked too often,’ says Mary Riley, a specialist self-build mortgage consultant and managing director of Advanced Flexible Self Build Mortgage (www.afsbm.co.uk).